Automated HIPAA transactions can save payers, providers $8.5B each year

Adopting fully electronic processes for six different claims-related business transactions could save the healthcare industry $8.5 billion each year, according to a new report from the CAQH Index.

For the last three years, fully electronic transactions have shown modest but steady growth, according to the report, even as adoption rates among six Health Insurance Portability and Accountability Act (HIPAA) transactions vary widely, the report says. 

Although the majority of hospitals and health plans have implemented fully electronic transactions for claims submission (93.8 percent adoption rate), far fewer have done so for eligibility and benefit verification (70.5 percent) and claim payments (61.4 percent). Electronic transactions for referral certification and prior authorization have adoption rates of just 6.2 percent and 10.2 percent, respectively.

A more pronounced shift toward electronic transactions in each of the six categories could result in significant savings for both payers and providers. Overall, health plans spend approximately $2 more for each manual transaction, and together, providers and plans spent $5.87 per manual transaction compared to $1.37 for each electronic transaction, according to the report. Transactions such as eligibility and benefit verification cost more than $8 less when submitted electronically, yet the number of telephone inquiries for eligibility verification has remained stable over the last several years.

CAQH urged payers and providers to "share and expand best practices to increase adoption of electronic transactions and reduce utilization of manual transactions among industry stakeholders" through outreach and education programs. The organization also pushed for more targeted efforts to eliminate adoption barriers and review potential technical and policy changes that would lead to improved efficiency and reduced costs.

Beginning in 2013, Centers for Medicare & Medicaid Services adopted new rules to facilitate electronic insurance eligibility and claims status transactions. Since then, research has shown that insurers typically process electronic claims faster than manual submissions, prompting more physicians to make the switch. Insurers like Aetna have found the switch to electronic transactions has simplified processes, improved efficiency, and reduced expenses.

To learn more:
- here's the CAQH Index report